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by Robert Hollenshead
May 23 2011 10:38AM
In the market today there are two major players, CarFax and AutoCheck.

CarFax is by far the brand that is recognized by the retail public due to tremendous commitment of marketing on their part.  Massive advertising and very tricky, marginally untruthful facts, have proven to be very successful in building their brands. 

They originally came to the market by targeting the dealer body and were scornfully rejected.  They turned to a ferocious very costly retail public advertising campaign.  Employing extremely catchy, while marginally deceptive, catch phrases has proven to be  very effective.  By any account it is brilliant marketing model that should be taught at Wharton School of Business.  It has forced the dealer body to rounded profess validation of the product even while dealers know the report’s patent invalidity.

They entered a market that is void of competition with a product that is difficult to refute, regardless of the real facts and is above the fray in the sense that they have no skin.  The product offers a near worthless guarantee that amounts to almost nothing when they give false information. In the game while being free to randomly diminish the value of others assets in a very drastic way.  Minor to no damage that is often falsely reported has massive repercussions when selling an effected unit. 

The biggest problem outside of completely fallacious diminished value amounts, that verge on scandalously inaccurate values, is the vast majority of information that is excluded from their reports.  Their ads all lean heavily on the inference that they have all information about accidents.  This has given rise to a class of dealers that specialize in buying cars with good Car Faxes that have been wrecked and nothing shows on their report.  In both cases the result is dangerous and potentially costly misinformation to the consumer.

As any professional in the car business knows and will validate when it comes to the diminished value they suggest, once a car has been reported against a specific VIN, the real effect on value is multiples of their suggested amount and usually hurts the value thousands of dollars.  It can actually be as much as $20,000 regardless of the specifics of the report. 

In the case of AutoCheck it is a product that dealers or professionals rely on.  It includes auction announced conditions and is handled by auto motive professionals.  The problem with their product is the folks that own the product have not made a major attempt to compete in the retail market that is very costly to enter.  The result, from this writer’s perspective it is a very interesting, in deed wide out market that can be improved in accuracy in depth of reporting and accurate diminished value based on the type of information reported and professional analysis of the data.

5 Readers' Comments

1
Dave C
West Chester
PA 19380
7 years ago
I used to own 2 paint meters, and found them valuable for examining nearly a hundred cars each day at auctions and on the street. I was careful to make sure I knew the cars I bought. Clients and customers alike relied upon my expertise to guide them on the history of a car. I could tell you if a car was a cherished friend or a hated ex in just a few minutes of examination. That has changed, dramatically.

Since the explosion of the consumer public's dependence upon Carfax reports, I threw my Elcometer away and maintain an unlimited Carfax account instead. As a population, consumers no longer care if a car was truly in an accident, they just want to know if it has a clean Carfax. They won't believe me when I describe the severity of the accident, or even offer to pay for an independent verification. They just want me to show them the Carfax.

It is a travesty, and proof Bob is right about the power of their marketing techniques. Out of principle, my wife drives a perfect ca

2
Robert Hollenshead
MANHEIM
PA 17545
7 years ago
What a great testimony Dave. It is proof that the truth doesn't matter because the hype has trumped it. This is harmful to the consumer but it seems it doesn't matter to them.

This is very similar to the days when clocking cars was the norm. If you had a mileage certificate to cover you from the previous owner it was fine. Just like a car fax that is frequently misleading and very often not close to complete, we are relegated to conform to what we know is not accurate. And it is coming from the consumer. This is twisted logic and a direct result of fabulous misleading advertisement.

Thanks for your input candid Dave.

3
miatasportscar
Geneva
NY 14456
7 years ago
I once sold a gorgeous unmarked Mazda Miata LE with just 7700 miles on it. It took me six months and an attorney letter to get Carfax to repeal their mistake. They called it a simply typing error, but the Carfax for my car read 77,000 miles, for which the customer wasn't too pleased over. If it wasn't for my impeccable reputation I coulod have eaten the car back, however six months of go around with Caefax, and they finally changed it and admitted their mistake. Just one Carfax horror story, there are many more.....
Gerry Acquilano
Geneva, NY

4
North Florida Motosports, LLC
Gainesville
FL 32609-2382
7 years ago
Amazingly articulate and insightful characterization of the real world as it relates to Carfax and the retail consumer.

I can add one more ice topping to the story, that implicates Manheim's guilt by Association. As we all know, PowerSearch offers a Carfax link with every unit posted, due to both Manheim's and Carfax's representation of their "Special Integrated Relationship." However, management and marketing directors of both Manheim and Carfax refuse to acknowledge or respond to repeated inquiries as to why a unit can be posted on PowerSearch with a "Clean" Carfax Report alongside a "Frame Damage" Manheim ECR, and yet Carfax will refuse to acknowledge the data from their Special Integrated Relationship Partner.

Now, tell me how I explain this to my retail customer ?

5
sals
Allentown
PA 
7 years ago
I agree with you that Carfax is a total scam and offers useless information for a price. We went almost exclusely to autocheck, where I find the information to be somewhat more relavant. We dont however run them on every unit, but only if its a unit where I may suspect something, or if Im buying it online. However, the bigger problem is the customer who comes in demanding their carfax to which they feel entitled! If they want one so bad, have them go the the website, whip out their credit card and have at it. I feel that carfax spends our $$ for us with their 'get your free carfax at any reputable dealer' adavertising, and that just rubs me the wrong way, and its not going to change till us dealers band together. Remeber, we're just making them richer and we're doing all the work! Just venting! :)